8 things to keep in mind while taking a home loan
With the prices of houses skyrocketing, it's common to seek home loan from banks and financial institutions. Due to the falling interest rates, home loans are now available cheaper. The process of online applications has made approvals and disbursals fast. However, you get an approval for a home loan only after banks go through your credit history and check your borrowing potential.
If you are planning to take a home loan, here are a few things you must keep in mind: (1)Legality of the property
Before you lay your hands on a property, make sure the builder is reputed and all papers of the property are in place. With RERA implemented across regions, you can check the builder's profile online on the RERA website. Banks often refuse to give loans if the builder is not in its approval list.
(2)Down payment
You must have a budget chalked out before you start looking for a house. Calculate the down payment you would have to pay. It is usually about 20% of the value of the property. You can choose to pay more from your pocket if you can afford. You must save up for the down payment. In case, there is a deficit, you have take soft loan from your employer, family and friends. Try to minimise the borrowing amount to reduce the interest outgo.
3)Check your eligibility criteria
Home loan lenders have a list of eligibility criterion and only if you happen to meet those, you are considered a potential borrower. Banks typically look at your credit history to understand your repayment habits and prefer a credit score of 750 for lending out. Your age, income, occupation, collateral security, margin requirements, etc are also important factors when it comes to determining the interest on the loan.
4)Check the fees and charges associated with the loan
Home loans come with associated fees and charges. Processing fee is the most common fee payable at the time of application. Check if the fee is reasonable when you choose a lender.
5)Check the interest rate
The interest rate on loans is a determining factor in deciding where to take your loan from. Lower the rate, lower would be the EMI outgo. Home loans are offered at fixed interest rates and floating interest rates. While fixed interest rates remain the same through the loan duration, floating rates change with bank's changing lending practices. Weigh your options before you zero in on a loan.
6)Check your affordability of paying EMIs
Customers often take up a lot of burden when it comes to paying EMI thinking that it would get easier with time, as their income would increase eventually. Consider the possibilities of not getting a raise soon or other unforeseen circumstances. You should look at a loan to income ratio of 20% to 30%. You can make changes in the tenure to reduce or increase the EMI amount depending on your affordability
7)Buy an insurance plan to cover the loan amount
Once you have taken a loan, the outstanding balance liability falls on your family's shoulders in your absence. You can avoid this financial burden on your family by buying a mortgage redemption insurance cover while taking home loan. It is a decreasing term plan where the cover amount decreases as you repay the loan.
8)Shop around
There are hundreds of banks and financial institutions which offer home loans at attractive interest rates. Before buying a home loan, go online and compare the interest rates and charge structure of all available home loans. Comparing would let you choose a loan which not only has the most reasonable interest rate but also limited fees and charges
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(1) Black money clampdown: Is it a good time to buy a home?
The clamp down on black money may have a negative impact on the real estate sector, but it may be just what the doctor ordered for home buyers. For fence sitters waiting for housing prices to correct, this could well be the time to buy a house.
Reduction of cash component in a real estate transaction will encourage more genuine buyers in the secondary market rather than investors who are interested in simply parking their black money. This will eventually lead to deflation in property prices with some experts expecting up to 30% drop in real estate prices in markets such as Delhi NCR. Less than expected sales during the ongoing festive season is yet another reason why discounts are anticipated in the market.
The presence of some other factors have already turned the housing market attractive for end users. Interest rate cycle, for instance, has turned around and is now conducive for housing loans. The interest rate has come off by over 125 bps since 2015 and is expected to drop further through the year.
The Real Estate (regulation and development) Act 2016 aims to protect consumer rights and interests, involves greater transparency, higher penalties for delays and defaults, and improvement of accountability of real estate .estate is at a five-year high as income growth over the past five years (10 to 12% p.a.) has outpaced property price inflation (-10 to 10%).
The earliest green shoots are already visible. There has been a 15% year-on-year jump in home sales across top eight cities in the country to 78.2 million square feet in the quarter ended September, making it the best quarter in the past five years.
Data from Liases Foras showed that sales were dominated by the Mumbai Metropolitan Region and NCR that have grown 39% and 11%, respectively, over the previous year. This could just be the beginning of a healthy revival in demand for housing.
Reduction of cash component in a real estate transaction will encourage more genuine buyers in the secondary market rather than investors who are interested in simply parking their black money. This will eventually lead to deflation in property prices with some experts expecting up to 30% drop in real estate prices in markets such as Delhi NCR. Less than expected sales during the ongoing festive season is yet another reason why discounts are anticipated in the market.
The presence of some other factors have already turned the housing market attractive for end users. Interest rate cycle, for instance, has turned around and is now conducive for housing loans. The interest rate has come off by over 125 bps since 2015 and is expected to drop further through the year.
The Real Estate (regulation and development) Act 2016 aims to protect consumer rights and interests, involves greater transparency, higher penalties for delays and defaults, and improvement of accountability of real estate .estate is at a five-year high as income growth over the past five years (10 to 12% p.a.) has outpaced property price inflation (-10 to 10%).
The earliest green shoots are already visible. There has been a 15% year-on-year jump in home sales across top eight cities in the country to 78.2 million square feet in the quarter ended September, making it the best quarter in the past five years.
Data from Liases Foras showed that sales were dominated by the Mumbai Metropolitan Region and NCR that have grown 39% and 11%, respectively, over the previous year. This could just be the beginning of a healthy revival in demand for housing.
(2) NCR HOMES BUYERS SEEK SERVICE TAX REFUND
Noida :-
Homes buyers across NCR are now shoring up support to seek refunds of service tax on installements paid to builders, with the National consumer Disputes Redressal Commision (NCDRC) ordering the refunds earlier this week, citing a Delhi high court ruling.
The delhi high court had ruled on june 3 that home buyers cannot be charged sevice tax on payments made toward purchase of under construction apartment from builders if the total valule of the apartment includes the land value. It held the service tax is only payable on the value of services and not on the value of land.
In the case of suresh kumar bansal VS Union of india & others, the court had also said that if the developer has already collected service tax buyer would be refunded the amount with 6% rate of interest by the centre's revenue department.However, the high court judgement applies to flats purchased before july 1. 2012. The builders charge homebuyers service tax at the time they make part payments- currently it is 3.08 % of the total sale value in NCR. Since most homebuyers in the NCR have signed up for apartments prior to construction , they are now made exempt of service tax.
"We have made the buyers aware of the delhi high court ruling and the recent NCDRC order on the basis of it.Now we have asked all buyers to come forward and notify the tax department about the amount of tax that has been already paid. The builders will now need to secure refunds from the tax department and refund the same to the buyers,"
Indrish Gupta, a member of NCR Home Buyerss Association, said.Gupta who is also the co-founder of Noida extension flat owners welfare association , says if the taxes are not refunded , buyers may even more court for redress.
However, Credai (NCR) president Manoj Gaur said, "If there is a ruling, then the government needs to return the funds to the buyers. They can do that directly. Builders have so far been middle agents for this tax. If the builders have to execute it, then the funds need to come back to the builders first. If such a huge amount of fund are to be returned to those who have already paid this tax, this is going to be a mammoth task."
http://timesofindia.indiatimes.com/city/noida/NCR-homebuyers-seek-service-tax-refund/articleshow/53850972.cms
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